No Service Tax Applicable on sizing operation activity as sized coal is excisable product: CESTAT [Read Order]

No Service Tax Applicable on sizing operation activity as sized coal is excisable product: CESTAT [Read Order]

Service Tax - sizing operation activity - sized coal - CESTAT - Taxscan

The Customs, Excises, and Service Taxes Appellate Tribunal (CESTAT), Kolkata Bench held that no Service Tax is applicable on sizing operation activity as sized coal is an excisable product.

The Revenue appealed against the Order-in-Original passed by the Commissioner of Central Excise and Service Tax whereby the Commissioner was pleased to drop the proceedings initiated against the respondent, Integrated Coal Mining Ltd. (ICML).

The Commissioner held that sized coal is an excisable product and sizing operation is an activity incidental and ancillary to the completion of a manufactured product and since the value of sizing is includible and has been included in the assessable value of coal sold to the customers, CESC Ltd. and Cresent Power Ltd. by ICML, sizing of coal cannot be termed as a service taxable under the heading “Business Auxiliary Service‟ in terms of the Finance Act, 1994.

Mr. K. Chowdhury, the Counsel for the revenue reiterated that the Adjudicating Authority had erred in holding that sizing of coal is a process incidental and ancillary to manufacture of coal and that coal is a manufactured product and thereby dropping the demand of service tax made in the show cause notice.

The coram consists of P. K. Choudhary and P. Anjani Kumar noted that sizing of coal is an incidental and ancillary process to make coal marketable and thus complete “manufacture” of coal and to make it into “excisable goods” as per Section 2(d) of the Central Excise Act. The process of sizing of coal is also therefore outside Section 65(19) of the Act since it is a process in the manufacture of the final product, sized coal.

The ITAT in the light of the decision of a coordinate bench of the Tribunal in CCE Vs. Spectron Engineers Pvt. Ltd. held that discharge of tax liability under one law precludes the invoking of another law merely for garnering revenue that has thereby escaped one of the jurisdictions.

Subscribe Taxscan AdFree to view the Judgment

Support our journalism by subscribing to Taxscan AdFree. We welcome your comments at info@taxscan.in

Related Stories

Taxscan Subscription @599 @420+GST
* Festive offer valid till 17th April only
Taxscan Subscription @599 @420+GST
* Festive offer valid till 17th April only